Vol. 7, Iss. 48, DECEMBER 2014

Importance The article presents the methods of determining debt load with the aim to build the optimal debt portfolio, which facilitates an increase in company value. The practice shows that the universal solution does not exist, and the selection of criteria of debt load optimization is a part of the financial policy of each particular company.Objectives The paper aims to study the existing models of determining debt capacity: the WACC method, adjusted present value method of S. Myers (APV), EBIT-volatility method, EBIT-EPS model analysis, and using of the industry benchmarks for the values of debt position limits. Methods The analysis of the provisions and rules and regulations of the debt policy of several companies allows identifying the most common practice to determine the optimal leverage and the order of management decisions (formation of internal credit ratings and determination of competence of financial management in the area of attracting borrowings). Using the example of OOO Rostelecom, I tested the WACC model in order to analyze possible practical application of the models of optimal debt level with the target function to maximize company's value. Results The obtained findings show that calculation of credit capacity, which corresponds to optimum level of debt load, can be a tool in managing company's financial flexibility. Using the "credit buffer" indicator, defined as unused credit capacity, financial management of a company can make substantiated management decisions in the field of financial and investment policy. Conclusions and Relevance I emphasize that the limits of debt load described in the paper may become a basis for determining the ceiling values of financial covenants included in credit agreements or issuing documents of placed corporate bonds.